WSO2, a company that provides API management and identity and access management (IAM) services for enterprises, has been acquired from the Swedish investment giant EQT.
Terms of the deal were not disclosed, but JS has learned through sources that the deal values WSO2 at “more than” $600 million, with EQT gaining a “significant majority stake” for the price.
WSO2's products include open source API manager, similar to something like Google's Apigee, which companies use to build and integrate all their digital services, both in the cloud and on-premises. The company offers tangential services such as API management specifically for Kubernetes, as well as for its flagship Identity server – kind of like Okta – that companies use to manage identity and access functionality in their apps, such as single sign-on (SSO).
Founded in 2005 out of Sri Lanka, WSO2 had raised about $130 million in funding from the likes of Intel, Cisco and Goldman Sachs, with its latest tranche on its way. through a $93 million Series E round in 2022. An official valuation was never announced, but items were available from some outlets at the time reported a valuation of over $600 million. So that would mean WSO2 is somewhat stagnant, although the “over” facet here could mask some movement in the company's valuation.
A strong track record
Co-founder and CEO of WSO2 Sanjiva Weerawarana has a strong track record in open source, particularly on Apache Software Foundation projects, and was one of the key designers of the cloud native Ballerina programming language. Weerawarana has also been driving for Uber since 2017. what he says it is designed for 'challenging the norm' and making it more socially acceptable in his native Sri Lanka.
WSO2 is a fairly well-distributed company, in keeping with the ethos of other companies founded around open source. Although the company has a US headquarters in Santa Clara and much of its senior management team is spread across the US, its focus is in Sri Lanka, where much of its workforce is based – including Weerawarana, which is based in the capital Colombo established.
With that in mind, it's worth noting that the acquisition was actually made by an EQT subsidiary called EQT Private Capital Asia, formerly known as Baring Private Equity Asia, which acquired EQT. in 2022 for €6.8 billion to serve as a private equity vehicle for Asia.
With a global spread of customers including AT&T, Honda and Axa, this is something that EQT Private Capital Asia partner Hari Gopalakrishnan says was a key part of the decision to invest. Additionally, as cloud computing and AI drive demand for security infrastructure, WSO2 was a particularly attractive proposition for an investment firm with recent form in enterprise software.
“Software is a key focus sector for EQT, and WSO2 is a strong business that has scaled globally with an enterprise customer base spanning the US and Europe,” Gopalakrishnan said in a statement. rack. “[We] I believe the company is well positioned to benefit from long-term trends such as digital transformation and the increasing adoption of GenAI.”
EQT says it expects the acquisition to close in the second half of 2024.
